Motley Fool Hidden Gems Investing - Amazon's Prime Move

Episode Date: January 19, 2018

Amazon names the finalists for its second headquarters and boosts Prime prices. IBM breaks a losing streak. Lionsgate entertains suitors. Apple brings cash home. And Starbucks goes cashless. Plus, veteran auto industry journalist Paul Lienert talks electric cars, autonomous cars, Ford, and GM. Thanks to Slack for supporting The Motley Fool. Slack: Where work happens. Find out why at slack.com.    Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey Ontario, come on down to BetMGM Casino and see what our newest exclusive, The Price is Right Fortune Pick, has to offer. Don't miss out! Play exciting casino games based on the iconic game show, only at BetMGM. Check out how we've reimagined three of the show's iconic games, like Plinko, Cliffhanger, and The Big Wheel, into fun casino game features. Don't forget to download the BetMGM Casino app for exclusive access and excitement on the Price is Right Fortune Pick. Pull up a seat and experience the Price is Right Fortune Pick

only available at BetMGM Casino. BetMGM and GameSense remind you to play responsibly. 19 plus to wager. Ontario only. Please play responsibly. If you have questions or concerns about your gambling or someone close to you, please contact ConnexOntario at 1-866-531-2600

to speak to an advisor free of charge. BetMGM operates pursuant to an operating agreement with iGaming Ontario. 23andMe's Health Plus Ancestry Kit is a personalized tool for understanding how your genes may influence your health. Start the year by learning more about your DNA. Go to 23andMe.com slash fool and get $30 off each Health Plus Ancestry Kit now through January 31st. And thanks to Slack for supporting this week's episode of Motley Fool Money. Slack is a messaging app that brings together all your team's communications in one place, making work simpler and more productive.

Go to slack.com to learn more. Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money. Chris Hill. It's the Motley Fool Money radio show. I'm Chris Hill, and joining me in studio this week from Million Dollar Portfolio, Jason Moser and Matt Argersinger, and from Total Income, Ron Gross. Good to see you, as always, gentlemen. Ron Gross. Hey, Dan.

How are you doing? We've got the latest headlines from Wall Street. We'll head to Detroit for a report on the automotive industry. And as always, we'll give you an inside look at the stocks on our radar. While we are here in the studio across the Potomac River, Congress is attempting to keep the government open. We have no say in that, gentlemen, so we're just going to stick to the business world. I mean, technically, we do have a say. I mean, these yahoos that are not able to make this work,

I mean, our say should just be to kick their asses out of their cushy little seats, right? I mean, they got one job, one job, and they can't make it work. Hot take, and we haven't even gotten to our lead story. We're going to begin with the corporate version of The Bachelor. The list of cities vying to be home to Amazon's second headquarters has been pared down to 20. And according to oddsmakers in the U.K., here are the favorites. Boston, 3-1 odds. Atlanta and Austin, Texas, both 7-2.

Pittsburgh, and something I like to refer to as Ron Gross Country. Montgomery County, Maryland, both 8-1. Ron, how are you feeling about this? Oh, no, Chris. The proposed site in Maryland is 1.9 miles from my home. Get comfortable. Oh, there are pros and cons here. Obviously, Amazon says they're going to spend $5 billion in the area.

They're going to employ 50,000 folks. You know, it should be great for the economy, the local economy, wherever they relocate. Certainly taxes will be generated for that municipality. But, oh, oh, oh, the negatives in terms of traffic and, you know, prolonged construction. And how are you going to put the people to school, like the kids? I mean, it's not just 50,000 people. It's 100, 150, 200,000 people once you take into account entire families. I think you'd better be careful what you wish for. This could be a big problem.

This is the most stressed I've ever seen Ron Gross. 1.9 miles. Did I mention that? The value of your house might double, though. That's one thing to think about. Now, Seattle home prices have gone up 17% from a year ago, if that's any indication, and they've been around there for a while. So, that is the plus side. I'm not one to look a gift horse in the mouth, but this is shaky. I mean, these cities and regions, they're spread all across the country. But I mean, if you're betting, Jason, aren't you betting on probably at least the eastern half of the

United States? I mean, they got Seattle. I don't know, maybe I'm just thinking about this too simply, but it just seems to me like it's going to be somewhere in the east. I tend to agree. I mean, I think if you look at something like LA, and I think that was the only West Coast city to be on the list, and I think maybe that was just to humor them. I can't fathom why they would actually pick LA. But yeah, I'm not taking the Homer point of view here, but it's hard to fathom why they wouldn't choose one of those three, Montgomery County, D.C. or Northern Virginia. The other one that I think probably comes into play here is Atlanta. Very affordable living down there. And it is obviously growing

very quickly, but there are plenty of places to live outside of the Beltway there. Big airport. The one thing Atlanta really lacks, though, is any credible form of public transportation. But, you know, that could probably be something that they attempt to solve as well. I'll be a little bit of a homer. I think Boston definitely, I'm not surprised it has the best odds just because of the university, the technology, infrastructure there. Isn't it too crowded, though? Well, it depends. I mean, Boston proper is very, very crowded. So, we're talking about the infrastructure.

The infrastructure's good. I mean, the Big Dig was a nightmare, Chris and I know, for 20 years, but it fixed the city in terms of getting in and out of the city. And, you know, Logan Airport's a nightmare. But I do agree. I think it's an East Coast. I think Boston or the D.C. area or Atlanta is probably where it comes down to. Oh, yeah, because the Atlanta airport is a piece of cake. No problems there. This news overshadowed, and probably rightly so, the other news out of Amazon this week, which is, somewhat quietly, Ron, Amazon raised the price of Amazon Prime, not the annual membership, but the monthly membership. Yeah, 18%, now equal to $156 per year

versus the $99 if you subscribe annually, which is not going up. They're keeping that. So, one has to wonder, is this just an acknowledgment that free shipping is expensive and they needed to raise these prices to make this viable? Or are they disincentivizing monthly and trying to drive people towards the annual? I'll leave it to whether you're a cynic or not, to depending on which. Student pricing, which is actually cheaper on a monthly basis, is also going up 18%, interestingly. So, this is good for Amazon, I think, because it will either raise revenue to a certain extent or it will drive more annual Prime members, which I think is the ultimate goal. Yeah, I think that's exactly it.

It's really about enticing people to just become annual subscribers. And look, it might sound like Jeff Bezos is paying me to say this, but I think you truly are. I think we'd all agree, you're being irresponsible if you're not already a Prime member, just given everything you get for that $99, which is the annual subscription amount, it's incredible. Wait, is he actually paying you? Is that something we can get it on, too? I wish he was. For the first time since 2012, IBM's quarterly revenue rose. Fourth quarter profits also came in slightly higher than expected. Matty, shares are big blue, still falling on Friday. So, for anyone who thought,

hey, they've broken the streak, they've turned the corner, not quite. No. You think the first time you grow in six years might be ... And, by the way, they used all the right buzzwords in the press release. Blockchain? Well, you've got enterprise, you've got cloud, you've got blockchain, you've got artificial intelligence. Wait, I was kidding. Blockchain is actually ... Blockchain's in there. Well, what do you think the B stands for?

It's got to be in there. They could have thrown Warren Buffett in there, too. They didn't, but they thought about it. But, yeah, all of that wasn't enough to get investors excited. We are only talking about revenue growth of 3%, by the way, year over year, so it's not really a big mover. And by the way, they did have a loss of more than $1 billion in the quarter, obviously because of a one-time tax charge of $5.5 billion. That's a tax that they're going to have to pay on accumulated foreign profits in order to bring cash back. It's also, they're lowering

the valuation of the tax credits they had, because at a lower corporate tax rate, they're just not worth as much. To me, and I think all of us agree, IBM is a ship with a weird rudder. I don't know where it's going. I can't figure the company out. And I would say, where's the growth going to come from? Can they compete with Amazon or Microsoft in cloud? What does blockchain or artificial intelligence even do for a company like blockchain or for their customers? I have no idea. So, IBM, ignore. Fourth quarter revenue for American Express came in higher than expected, but shares falling a bit on Friday as Amex is dealing with some charges related to the tax law changes.

Yeah, I think a lot of that stuff that Matty was just talking about in regard to the new tax legislation comes into play for American Express as well. I think that the comp that most investors use today to compare American Express, they compare it with things like Visa and MasterCard. I think that's probably, they're a bit different now. American Express is more like a quasi-bank. It's interesting to note that while they will continue to pay their dividend, they're suspending their share buyback program for the first half of 2018 in order to build that balance sheet back up. Because of that bank holding status, they have to adhere to some regulations and meet some ratios there. Now, with that said, I

think American Express is a good business. There's no question there. But the big hurdle they face on the card side in the coming years is, is there some deterioration in that brand and the perceived value in being a cardholder as competition continues to heat up with companies like Visa and MasterCard really growing out their robust rewards programs? I think it's a tough road ahead for American Express. By the way, Facebook announced this week that Amex CEO Ken Chennault is going to be joining the board of directors at Facebook. Zuckerberg said he's been trying to get Chennault on the board for years. When I first saw this, my immediate thought, Jason, was Facebook getting into payment of some form. If that

is in fact the case, is Ken Chennault the right person for that? Well, I think that is generally the reason why something like this would happen. I think payments, learning more how to treat consumers. Facebook is trying to figure out how to step into that realm and diversify its revenue stream. I don't know that Chenault is really the best name for this type of position. He didn't exactly leave, or he's not leaving American Express on the highest of notes. But with that said, I don't think that Facebook's entry into the payments market is going to be something of a homegrown nature. I think it's going to have to be something that's

an acquisition of sorts. And whatever they decide to do, it's going to cost them a lot of money to get that presence. By the way, I think it was last week, Matty, Disney somewhat quietly announcing that Sheryl Sandberg from Facebook and Jack Dorsey from Twitter are no longer going to be on the board. I guess their terms will expire and that will be that. So, what was your take on that? Well, it makes sense. I was surprised to see it, by the way. But it makes sense in reflection, just because if you think about what Twitter and Facebook are doing with the video content, that's really where they're

moving towards. And if they're becoming quasi-media companies, and you have major executives sitting on the board of Disney, the largest media company in the world, it seems like there might be conflicts at some point. I have to think Facebook has got to be disappointed because Facebook is pretty adamant about saying, no, we're not a media company. And now you have the Walt Disney Company saying, well, we think you are. Starbucks has a history of testing food and beverage items before rolling them out nationwide. But one Starbucks location is testing something that could have ripple effects way beyond the food and beverage industry. Details coming up. You're listening to Motley Fool Money. This episode of Motley Fool Money is brought to you

by 23andMe. 23andMe's Health Plus Ancestry Kit is a personalized tool for understanding how your genes could influence your health. You just send in a small sample of your saliva, and you'll receive more than 75 online reports on topics like genetic weight, lactose intolerance, and how your genes may impact your risk for certain diseases. Start the year by learning more about your own DNA. Go to 23andMe.com slash fool and get $30 off each Health Plus Ancestry Kit now through January 31st. That's the number 23andme.com slash fool. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, Matt Argesinger, and Ron Gross. Shares of Lionsgate Entertainment up more than 10% this week on reports of a possible takeover.

What do you think, Matty? Is someone going to go out and buy themselves a movie studio? Actually, I think so. I mean, we've already seen this happen in the last several years. And so, yeah, I mean, I'm not surprised there's chatter out there. I think Amazon, Verizon, and it sounds like CBS might be potential suitors for Lionsgate. And I'll say it dovetails nicely with something our own David Gardner tweeted earlier this week, that he thinks AMC Networks could be a nice acquisition candidate for Netflix.

But I have to say, I don't see Lionsgate, I don't see AMC, I don't see Scripps Networks, Discovery, I don't see these as independent companies in a few years. Because if you think about where things are going, it's really gravitating to the big platforms. And it's just amazing to say this now, because we wouldn't have said this five years ago, but really to me, it's coming down to Netflix, Amazon, and Disney, now that Disney has acquired Fox. And I think all the smaller players are probably going to get gobbled up by them, because these companies are looking for content, quality content. And you've got Lionsgate, AMC, and with that kind of content. When I think about Lionsgate,

the first thing that comes to mind is The Hunger Games. That ship has sailed in terms of their ability to really monetize that franchise. Whereas with AMC, their track record is much stronger in terms of delivering, particularly, television hits. Breaking Bad, Mad Men, The Walking Dead, that sort of thing. Those companies are roughly the same in market cap size. Yeah, $3 billion. If someone's looking to buy them, Isn't AMC the move here? AMC, well, it depends. I think Lionsgate's got some really nice strengths when it comes to creating films on a budget.

They do it economically better than really any other studio out there. And so, I think there's qualities to both. I wouldn't be surprised if both are acquired within a year. You're saying Lionsgate may not be making the Marvel franchise movies, but they're also not going to have a John Carter-type bomb. Exactly. Good old John Carter. Apple was not in the news so much this week as Apple's cash was in the news.

Apple announcing it will pay a one-time repatriation tax of $38 billion on its overseas cash. The company also plans to invest $350 billion in the United States over the next five years. You tell me, Ron, which of those two should investors care more about? How long have we been talking about Apple bringing back that cash? As long as we've been doing this show. Do not feel bad about them paying $38 billion in tax, because they're saving $43 billion as a result of the new tax plan. That's all good. They're going to commit to $350 billion over the next five years, contribution to the U.S. economy, $30 billion in capex over

the next five years. They're going to pay $2,500 stock bonuses to a bunch of its employees, most of them, they say. This looks really good for both investors and the company itself. committing to investing quite a bit of money into their business, which indicates to me that they think the future looks bright. I think the other thing to mention is that the company has returned $233 billion to shareholders through buybacks and dividends over the last five years, but that's largely been done through debt. They've had to borrow because all the money was overseas and they couldn't really use it. So, now that they're going to have all this money, it's going to be interesting to see, is it now they'll be able to use their

own cash, they continue to borrow if interest rates remain low. Will they choose to pay down some of that debt now that the cash is back here? It increases their flexibility very significantly in terms of returning capital to shareholders. This is why I think all of us sitting at this table thought at some point there would be a repatriation holiday of some kind. It would probably be short-term, one year or something like that, where all these companies could bring back cash, and Apple might bring back, say, a third or half of its cash from overseas. But I think that's why it was so powerful that the permanent change to the corporate tax rate has really changed behavior.

Companies like Apple are saying, well, if I'm going to have to pay taxes when I earn foreign profits anyway now going forward, I might as well bring it all back to the United States, which now has a low corporate tax rate. This is one of the really positive things I think that came out of the tax reform bill. We can debate about all the other issues surrounding it, but this was a powerful impact. Yeah, I agree. It's interesting to see the divide between the politicians, who really, so many were vehemently against this tax bill. And be that as it may, it still sounds like this is going to bring in somewhere in the neighborhood of $350 billion for the federal government over the course of the

next 10 years. Without question, the CEOs of all of these major businesses are saying that the reason they're able to do this is because of the new tax legislation. So, if you're an investor, you've got to be feeling really good about this, I think. Ron, any chance, did Apple say anything about, like, and we're going to subsidize the iPhone again? Keep dreaming. They did say they're going to open a new facility in Montgomery, Maryland. 10,000 people. The war on cash may have a new ally.

Starbucks has begun testing a cashless store in downtown Seattle. One Starbucks is now accepting only cards and mobile payments. payments. And Jason, if you are Visa, among others, I think you're doing everything you can to make sure that this test succeeds. Well, Chris, while I am a huge proponent of the war on cash, as we've discussed many, many times before, I actually don't agree with stores going completely cashless. And it's just from the perspective that it eliminates choice. And I think that when you are a retailer, a service provider of any kind, you really want to give your loyal consumers as much choice as possible. I think there are ways to steer

people towards cashless transactions while still having that cash option. You just make it a little bit less explicit. We've seen this with other restaurants. There was a piece in The New York Times that talked about some restaurants that were doing this as well. I think it's taken some consumers by surprise. I think, generally speaking, payments are moving more towards the electronic side. But I think having the cash option is still probably pretty important. When is the last time any of us used cash at a Starbucks? Is that a big piece of their business? I can't imagine. And again, I'm not arguing that at all. I think you simply want

to have that option, because some people are going to use it, and God forbid, your phone battery dies. I mean, you can't hack a $5 bill in my hand, right? But in terms of, I mean, going cashless also comes with some downside. I mean, say what you want about cash, but there's no service fee attached to paying cash. The business is paying to do that. The business is paying to do that. On the flip side, if you don't have to maintain a cash drawer, that's one less thing you've got to worry about. And obviously, there are bank deposit runs you have to make. So, there are trade-offs either way. I think ultimately, really, you just want to try to give consumers as much

choice as possible, typically. Where will the Bitcoin fit without a cash drawer? That's a very good question. Well, I'll also think, for some people, and fewer nowadays, but I just think the anonymous factor of cash and not being tracked and recorded for every purchase I make, you know. I can't tell you, in the golf business, how many times we'd see some of those guys coming to the shop around 3 o'clock in the afternoon. Hey, aren't you supposed to be working? They'd be like, well, yeah, can I get a cart for nine holes? And I'm going to pay cash.

Let's go to our man behind the glass, Steve Broido. Steve, where do you come down on the whole cash versus digital payment move? It always seems to make more sense to use debit or credit cards, typically credit cards with rewards when you pay them off every month, if you get something back. But there are still a lot of people, certainly in Japan, people, it's a cash country, and that's not going to fly over there. So I think it's something to be considered.

All right, Jason Moser, Matt Argersinger, Ron Gross. Guys, we'll see you later in the show. Up next, we are heading to the Motor City to check in on the North American International Auto Show. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill.

The North American International Auto Show kicked off this week in Detroit with nearly 1 million people expected to attend. Paul Leinart has spent his career covering the automotive industry, most recently with Thomson Reuters, and he joins me now from the Motor City. Paul, always good to talk to you. Thank you, Chris. I always envision you sitting in a nice, warm place, unlike Detroit in January. I don't envy you.

I mean, I'm a little curious about the auto show, and I think at some point I'd like to get there, but I'm not going to lie. The fact that it's in Detroit in January, that doesn't sweeten the deal. We'll see if we can move it for you. I appreciate that. What is your headline for this year's show? Oh, boy, that sure is a tough one. I would probably say in three words, trucks, trucks, trucks.

We're back to trucks. It seems like every other year or so, trucks are the big story, and then it goes to something smaller or greener. But 2018, it's all about the trucks? At this show it is. General Motors is showing its new Chevrolet Silverado, brand new, fully redesigned for model year 2019. Fiat Chrysler is showing its brand new Ram 1500, also fully redesigned for model year 2019. And Ford also has a truck. It's bringing back the Ranger. This one is their midsize truck that has been off the market for quite a few years in the U.S.

And it's coming in to do battle with the Chevrolet Colorado and Toyota Tacoma. The Lincoln Navigator, however, was the vehicle that took home the award of Truck of the Year, Honda Accord won Car of the Year, and the Volvo XC60 won SUV of the Year. Here's my question. How much do these awards help with sales? How much do these companies covet these awards so that they can gear their marketing campaigns around winning? Or does it only move the needle ever so slightly? Let me answer you in a circumspect fashion. As long as I've been covering the auto business, there have been Car of the Year Awards and Truck of the Year Awards from various organizations.

The ones you just mentioned come from the North American Car and Truck of the Year jury, which is composed of journalists. The journalists would like to think they have a lot of influence. I'm not so sure at times just how much influence we have on the buying public, particularly in this age of social media. So let me just straddle a fence on that so I don't annoy anybody, okay? Sounds fair to me. By the way, I'm not on the jury, but my wife is, so I really am walking a fine line here. Yeah, you don't want to get yourself in trouble on the home front ever. Oh, my God. No, thank you.

Ford Motor came out on Tuesday with some pretty disappointing guidance for 2018 and even beyond that. And I'm wondering, to what extent does that dampen the mood at an event like this? Or is that just something that is confined to Ford Motor itself? I would say Ford has some unique problems of its own, and its stock the next day took quite a hit as investors reacted to that news, that disappointment, if you will. The general perception is that Ford is lagging behind the other guys. It even seems to be lagging behind General Motors here in its hometown in terms of doing more to electrify vehicles, doing more to bring self-driving vehicles to the market. One example, GM said it's going to begin putting self-driving electric cars into commercial service early next year. Ford says it won't have its self-driving vehicles out till 2021, and those won't be all electric.

They'll be hybrids. This is something that you've started to focus on more in your coverage of the auto industry, autonomous vehicles, electrification. When it comes to self-driving cars at the auto show, what is the biggest change that you've seen compared to a year ago? I will tell you, quite frankly, the biggest change I have seen is actually no change at all. There aren't really any production self-driving cars on display at the show because there aren't any production self-driving cars. Tesla, I would say, is only partially self-driving. Cadillac has just introduced a partially self-driving car. So we're still a ways away from seeing full autonomy, at least in the vehicles that we can buy and lease, probably 2024, 2025 maybe.

That really jives with something I read this week. One Wall Street analyst warning investors who are thinking about buying auto stocks because, let's face it, there's a lot of coverage of autonomous vehicles and electric vehicles. There's a lot of excitement, and all of that is understandable, particularly on an emotional level. But this analyst came flat out and said, and I'm quoting here, we do not expect autonomous vehicles to produce meaningful revenues before, and the timeframe laid out was 2035 to 2040. Now, Paul, even if you're an investor with a long time horizon, that is a really long time to wait for meaningful revenue, because that's ultimately what's going to drive the stock.

And investors do tend to be short-term thinkers, but they also tend to love stories. For instance, that primarily is what drives Tesla stock. Elon Musk often has a really good story to tell. The other thing with self-driving cars is they're not going to be high-volume vehicles. We're not going to see any company making $5 million of these a year. It's going to be more like in the thousands or tens of thousands because these are going to be used at least for the first five to ten years, primarily in big cities to replace taxi cabs and cargo delivery trucks.

That's it. I was talking with one of our analysts who was in Las Vegas last week for the Consumer Electronics Show, and there were plenty of things on display that are mainstream, particularly when it comes to home assistants and smart speakers and the next generation of high-definition TVs. But there's also the gadgets at CES that are just sort of on the fringe that when you walk by them on the trade show floor, you just sort of look at them and think, I have no idea who would buy that or what use that would be in an everyday circumstance. When it comes to the auto show, is there anything that you've seen along those lines? I'm talking about the latter part where you just sort of look at it and say, what is that and who would buy that?

Now, bear in mind, I go into auto shows looking for the broader things, for instance, like autonomous technology or electrification technology. I'm a battery geek, okay? But I think the one technology that we're starting to see more and more of this year is voice assistant technology. For instance, Amazon Alexa is starting to be incorporated in a few cars. And I see this as an extension of us being able to plug in our Droids or iPhones into our cars and use Apple CarPlay or Google Android, Android Auto.

These systems sure have a long way to go to get perfected. I've got to tell you, Siri right now sucks. Sorry, can I say that on the radio? I mean, don't mince words, Paul. General Motors has been working on something speaking of Siri General Motors has been working on something called SURUS

and it's all capital letters S-U-R-U-S What in the world is SURUS and should I be excited about this or afraid of it? Thank goodness you didn't ask me to explain what the acronym means because I can't remember

but I can tell you about it because we stumbled across it on the lower level of the auto show I had not seen this thing before. It's a concept. Some might call it a giant skateboard, and here's what it's all about. Envision a vehicle with four wheels. Envision a vehicle without a cab or a truck bed or anything, just kind of a basic flat bed from front to back. Each of those wheels can steer itself. There's an electric motor at the front and at the other end, so it can be driven in either direction. And it's powered by a hydrogen fuel cell. And lo and behold, it's

fitted with LIDARs and radars and cameras. So it's designed to be self-driving. GM says it's a concept or a prototype for future use. It can be configured to be a military vehicle, a cargo carrier, an ambulance, a commercial truck. So it's pretty cool, but not very sexy. It does sound very cool. I'm curious, as we've seen over the past couple of years, the concept of ride-sharing taking hold, and more and more companies coming out, and for lack of a better term, buying in bulk. To what extent over the years have you seen the North American International Auto Show transform from being 100% aimed at consumers to being increasingly aimed towards companies, so that automakers and truck makers and now whatever this

flatbed robot vehicle is, they're now not looking to sell it to you or me, Paul. They're looking to sell a hundred of these in the same way that Boeing or Airbus is looking to sell several dozen airplanes at once. You know, Chris, you raise a really, really valid point. And I don't think we've given it nearly enough thought. But you immediately make me think of deals such as Volvo's recent agreement to sell 20,000 crossover vehicles to Uber. Is that important? Of course it is, because it helps Volvo advance technology that all sorts of consumers are going to use. but it's not about selling cars one-on-one to consumers. Another interesting trend we're seeing at the show that involves consumers,

but to a lesser extent, and it's, I think, part of this transitional business model that we're seeing evolving, some new startup companies that have set up shop at Kobo in Detroit are offering subscription services. Volvo also wants to start that. BMW wants to start that. What it is, is it does not require a consumer to buy a car, does not require a consumer to lease a car. On a month-to-month basis, you can get access to a vehicle. So while Uber and Lyft and ride-sharing companies provide on-demand access and you pay per use, this is yet another variation kind of of that model, a hybrid model, if you will, that lets you buy a package that includes insurance and maintenance.

and it's one payment. You can renew it for another month. You can swap it out for another vehicle. It'll be really interesting to see where that one goes. One last broad question for you. 2017 was a year in which the automaker's overall sales dipped slightly from the year before, and that's on the heels of sales growth year over year for, I believe six or seven years in a row. You mentioned earlier that Ford Motor has challenges unique to Ford Motor, but to what extent, if any, does the overall sales dipping affect the mood at an event like this? I don't have a sense for any angst or nervousness in that regard. I think the reasons why this year's show seems quieter than previous years

has more to do with other factors. Among them, a preference among younger consumers to move away from owning cars. Individual vehicle ownership is just not on a lot of people's radar. I'm talking now millennials. I was going to say millennials. They're ruining everything, Paul. Yeah, I try to tell my boys that, and they just kind of roll their eyes. Let's wrap up with a round of buy, sell, or hold. Buy, sell, or hold the likelihood that a child born today will ever drive a car themselves. Sell. So you and I don't have autonomous vehicles just yet, but grandkids, yes.

Grandkids, absolutely. My granddaughter, who's two years old, will likely never drive a car. I hope, just selfishly, I hope they still have to go through some sort of driver's license approval test. They'll probably have to go through iPhone training, I told her. It's trailing Uber in terms of private market valuation, but it appears to be catching on in terms of popularity. Buy, sell, or hold Lyft? Buy. doing lots of deals with an interesting assortment of people.

They're on the muscle right now, and Uber, as we both know, has its own unique set of problems. So that's a great opportunity for Lyft. And finally, it's getting increasingly difficult to find, so much so that the end may in fact be near. Buy, sell, or hold the stick shift? Sorry, as much as I love it, I've got to tell you, sell. Paul Leinart covers the auto industry for Thompson Reuters.

You can read his stuff. You can follow him on Twitter. Paul, I know it's a busy week. I really appreciate your time. It's always a pleasure, Chris. Thanks much. Coming up, we'll give you an inside look at the stocks on our radar. This is Motley Fool Money.

Thanks to Slack for supporting this week's episode of Motley Fool Money. Slack's a messaging app that brings together all your team's communication, and it gives everyone a shared workspace where conversations are organized and accessible. We've been using Slack at The Motley Fool for years, and it has been so helpful in terms of cutting down on internal email. It has saved so much time. It has made us so much more productive. And with Slack, you can drag and drop file sharing that works with all the apps that you already use in your job, like Zendesk, Google Drive, Salesforce. Plus, you can tailor Slack to your work with over 1,000 apps. And with mobile apps for iOS and Android that sync seamlessly, you can always pick up where you left

off, no matter where you are. Slack, where work happens. Find out why at slack.com. As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Welcome back to Motley Fool Money. I'm Chris Hill, and joining me in studio once again, Jason Moser, Matt Argersinger, and Ron Gross. Guys, three quick announcements before we get to the radar stocks. First, if you are interested in a summer internship here at The Motley Fool, good news. We are hiring interns this summer for our editorial team, our tech team, and yes, our investing team.

Yes. So, if you're interested, go to careers.fool.com for all the details, careers.fool.com. And go quickly, because we're closing out the deal pretty soon. Second, if you're looking to spread the word about investing, you can check out our new Motley Fool podcast shop, t-shirts, coffee mugs, hoodies, and more. That's at shop.fool.com. And last but not least, this week's show is our anniversary, guys. It was eight years ago this week that Motley Fool Money was first broadcast on radio stations across America. So, thank you to the program directors that continue to run this show when they could be running local financial shows where they're paying them straight up. And frankly, they're

not that good. So, we appreciate the program directors who opt for quality over straight cash. And especially, thank you to the two guys behind the glass who make this show happen every week, Mac Greer and Steve Broido. Happy anniversary, guys. Let's get to the stocks on our radar. Ron Gross, you're up first. What are you looking at this week? I'm going to go with Retail Opportunity Investment Corp, ROIC. They're a real estate investment trust that owns and operates neighborhood shopping centers. They've struggled, along with other retail REITs, because people are, quite frankly, a little bit afraid of retail right now. But they're focused on wealthy West Coast neighborhoods. They're anchored

buy grocery stores. I think that bodes well for them. Stuart Tan's CEO is a top-notch guy. They've got 97% leasing rate. They've increased their dividend every year for the past seven, and the yield is now 4%, which is not too shabby. Steve, we've got a retail read. Question? Well, my question is, what product would you never buy online? Would you only buy in a store, Ron? A hot tub. You wouldn't buy a hot tub online? I don't know. A tractor? That's good answers. A hot tub and a tractor. I would have struggled. You can combine them both for a true adventure, I think. Jason Moser, what are you looking at this week?

I'm going to go Emeril on you here and kick it up a notch with Spicemaker McCormick. Ticker is MKC. They've got earnings coming out next Thursday, the 25th. We have this company on the watch list in MDP still, because it does fire in on a lot of the qualities we look for in good businesses. Strong competitive position, capable leadership, big market opportunities. And I love the value prop they always spend in that they're responsible for 10% of the cost of the food that you're eating, but 90% of the flavor. And I am okay with that. But the stock has kind of been in a little bit of a state of limbo since this acquisition of Arby Foods. So, I'd like to see how that is all sort of coming together.

And if for some reason we get a little bit of an opportunity, we might be giving this thing a closer look. You're really hoping they miss, don't you? I wouldn't mind at all. Steve Broido, a question about McCormick? Well, we were talking about Amazon moving potentially to Ron's neighborhood. McCormick is a Baltimore company, and are they doing enough to promote Baltimore? Because you don't really associate McCormick with Baltimore. I don't think they are, Steve.

And I tell you, we went to that factory in Hunt Valley a few years back, and boy, it is off the radar. I think they could be doing a little bit more. Do they have Old Bay? Because when I think about Spice and Baltimore, that's it right there. That's the whole ballgame. They've got it all, Chris. Matt Argersinger, what are you looking at this week? This has got to be a first and only, but I have the same exact stock as Ron.

Watts crossed the table! Retail Opportunity Investment Corp, ROIC. Ron hacked Matty's personal computer. We did not collaborate on this, but everything Ron said. Plus, we just added it to our Best Buys Now in Million Dollar Portfolio. And REITs, by the way, have sold off recently. They're one of the few areas of the market that aren't participating in this historic stock market rally. So, yeah, I like the ROIC a lot. Steve Broido, do you happen to have a second question about ROIC? It's funny you mention it.

I have the exact same question for Matty. What product would you only buy at a place that would house or be a shopping center or something like that? Oh, gosh. I don't know. I could buy everything online nowadays. Maybe a hot tub like Ron said. You're going to double up on my answer also? Well, and maybe a car.

I don't think I'd buy a car online either. I just got to see it and drive it. Steve Broido, two stocks. You got one you want to add to your watch list? I think I'm going with McCormick, based on principle here. Anything you'd only buy in a store, Steve? Usually shoes. Shoes I bought online as well, but shoes, I always do better buying them in the store.

All right. Jason Moser, Matt Argersinger, Ron Gross. Guys, thanks so much for being here. Thank you. That's going to do it for this week's edition of Motley Fool Money. Our engineer is Steve Broido. Our producer is Matt Greer. I'm Chris Hill.

Thanks for listening. We'll see you next week.